Car tax (or Vehicle Excise Duty, to give it its technical term) is changing dramatically from April 2017. As with any government budgetary tweak, there will be winners and losers when the changes are made. Now, a detailed study from Parkers has revealed who those winners and losers will be – with some surprising conclusions.
Car Tax Changes: The Background
Back in 1999, the government began to make changes to the car tax system so that people driving less polluting cars wouldn’t pay so much Vehicle Excise Duty.
To begin with there was a discount for cars below 1100cc, then in 2005, a new system was introduced with various price bandings based on emissions.
Zooming back to the present day, cars are generally far less polluting than they were. The Chancellor worked out that by next year, around 75% of new cars would be exempt from car tax. Unsurprisingly, this resulted in a revamp of the Vehicle Excise Duty system – one that according to the Parkers’ report will earn the government over £5 Billion in extra revenue by 2023.
Car Tax Changes: The New System
The new car tax system is much simpler than the current regime. There will be two Vehicle Excise Duty rates, and while one is still a zero (free) rate, it will only apply to cars with no emissions whatsoever (i.e. hydrogen or electric cars). The other standard rate, for all other vehicles, will be £140 per year.
Then come the complicated bits; Every car has a “first year rate” for when it is initially taxed. This can range from zero for electric cars, to £2000 for gas guzzlers with emissions of over 255 g/km. In addition, cars purchased for over £40,000 will attract an additional tax liability of £310 per year for years two to six of the car’s “life” – a total of £1550 per premium vehicle, regardless of how “green” it is.
The Parkers’ study suggests that many drivers of polluting vehicles will actually end up better off under the new system than before. Despite the hefty “year one” tax costs, over the course of six years owners of these cars will see their total car tax liability drop due to a big reduction in the standard rate compared to now.
The most significant conclusion from the report is the fact that over 90% of the extra tax that will be raised will come from drivers of cars with emission figures lower than 130g/km – which it’s fair to say does seem a little unjust.
You’ll find more details of the Parkers’ study here. It’s important to note that these car tax changes only apply to new cars. Existing vehicles will continue to be taxed under the “old” regime.
my car Ford Focus 1.6 rEG MK64 OSO 64 PLATE HOW MUCH ROAD TAX PLEASE
Hi Joe, If it’s an existing car the tax will be unchanged as we understand it. Best wishes,
What has always puzzled me is zero car tax??why, they still use the roads and cause damage to the road through usage.
I think all vehicles should be taxed regardless of emissions.
How much will I pay on my car which runs on LPG ?
why isnt evry car taxed the same as they all use the roads the same, nothing to do with pollution bandwagon, just a scam to rob people, also all the 50 billion tax money raised should go on fixing the roads not just the 13% motorists took for a ride as allways,
Car tax should be scrapped entirely and the price added to fuel. The more somebody uses, the more they pay. This is fair. The more a motorist drives, the greater the wear and tear on the roads, and through fuel pricing a proportional price is paid. All vehicles contribute to pollution in one form or another.
I agree with Stephen Gibson – car tax should be scrapped and added to the cost of fuel much fairer to all
WILL NOT HELP THE AIR QUALITY, WE MIGHT AS WELL ALL GET BIGGER CARS AND TO HECK WITH THE EMISSIONS….SO MUCH FOR THE GOVERNMENT CARING ABOUT THE ENVIRONMENT,
Why isn’t the government pursuing VW for its emissions scam ? like the USA, we bought these vehicles in good faith and will now see resale values tumble, what’s good for the goose etc.
It’s about time they taxed the cyclist as the motorist has paid millions having the cycle highways constructed for their use only also they should pay insurance so when they scratch you car we could claim
Why are cyclist not being taxed, why do they not have insurance licence and training? They are a menace to all who use the road and pavement then they could be fined and money generated to from them
Just remember if you own a diesel vehicle. This means all your bills will be going up, all the big chains ,need to get there produce to supermarkets, shops in the country ,all of your parcels etc, so they keep on about emissions the uk we are not the only country that has diesel powered machinery take a look @ others. At least we do not have to wear mask and all this building going on materials have to be delivered, more cost on new houses
Looks like the sale of new cars will drop dramatically. That opens a whole new can of worms.
IE: Fields full of new cars rotting away, lack of demand, factory closures, thousands of people made unemployed. All this sounds familiar. And all because of government greed as always.
Why tax bicycles, when (like electric cars) they produce zero emissions, but are also very light and so do not damage road surfaces, and take up a fraction of the space on the road? A cyclist puts many times more physical energy into their journey than a car driver, and puts themselves at far greater risk of injury or death due to careless and inconsiderate driving by (some) drivers of motor vehicles. They should be rewarded for their efforts. Just think about it, if every cyclist gave up cycling and drove a car instead, that would add many more cars to the road, resulting in more traffic, more congestion, and slowing your journey down even more than the ‘inconvenience’ of having to slow down to pass a few cyclists. Think about it! In any case a ‘cyclist tax’ would be impossible to enforce and would cost more to administer than it raised.
I drive a renault scenic 1.6 lpg dual fuel car and have to pay £260 a year road tax, it is ridiculous.
You all forget one thing the Tories will always find a way to squeeze money from the working man, % wise the rise for the average working man this is huge but % wise for the rich it is spare change, I like many would look at the RFL rate before I buy, but now I can buy something with some more grunt and know I am paying the same as the economical environmentally friendly green driver, my current car attracts a £20.00 PA RFL one of the reasons I purchased it. The only beneficiary from this new scheme will be the chancellor and definitely not the environment , there will be another scheme in the pipework to squeeze more of your hard earned in the name of the environment , many of you voted in these Tories and look where we are now their only intent is to screw the lower classes, Dickensian Britain here we come.
Cyclists are taxed as its included as part of the Council Tax paid by each individual.
They are also subject to the same rules as all other road users and can be fined and prosecuted as needs however the police don’t have the manpower of finances to do so. Maybe a bit of a cycle?
However to say all cyclists are a danger is way too much of a general comment. Unfortunately the minority spoil it for the majority – the same could be said for car drivers AND pedestrians
In reply to Mr Price regarding cyclists, I remember when I lived in Bermuda just after the war, cycling and the horse and carriage were the only means of transport. Even then cyclists had to have a registration number on their bike and had to have insurance as well. Apply the same procedure here resulting in more revenue and safer cyclists.
In reply to Patrick Price, what do you estimate the emissions to be from riding a bicycle ? Why no try it yourself and see how much of a “menace” some car drivers are to you plus the fresh air and exercise may help to keep you fit and clear your brain.
I agree with the previous comments regarding cyclists in general. I grew up in Guernsey a long time ago in my time cycles had to carry a licence plate this also required the cyclist to have insurance
I agree that they are a menace on the roads and pavements with complete disregard for pedestrians not all but a lot if a licence was introduced and insurance made a legal requirement any accidents a claim could be made instead of through the civil courts.
I own a volvo S60 D5 for the last 5 years the MOT says emissions to clean for smoke machine to obtain a reading, still have to pay road tax though
The selfish comments on here about bikes, do you know my bike has insurance along with many thousands of other,it is insured for £3000000, yes three million liability, is your car insured for as much, som unless you have something constuctive to say ,keep quiet.
As ive said before my bike along with thousands of others is insured, and for £3000000 ,yos three million, liability, is your car insured for that much.
All the cycling argument boils down to is selfishness.
Plus did you know roads were first tarmac’d for cycling long before we had cars.
The whole global warming thing is a gigantic con. In the 1600’s, ships were plying their trade right across the arctic, as the ice had melted to almost nothing but it came back again, obviously, otherwise it wouldn’t be there now. Also, thoudans of years ago we lived in an ice age where nothing lived and I really can’t remember reading in history about all the vehicle pollution and greenhouse gasses, so we must have has global warmiing as a NATURAL thing and something that happens at times. In the past thousand years the arctic ice has reduced and increased loads of times and will continue to do so whatever we do. Do you remember years ago it was predicted that we were in for another mini ice age? Obviously the Government could’t see a way to make money out of that so global warming was invented and has made millionaires out of a lot of people with all the useless wind farms and solar panels which give an average of about 2 candlepower in a day. If the wing is too strong the turbines have to be switched off and thre is the same result when there is no wind at all. How much sunshine do we get for the solar panels, not that much I would imagine. If research teams are not researching global warming, they do not get Govermnment subsidies which is why everybody is an expert on it. Every prediction the IPCC has made has been proved wrong but they are still listened to and treated as though their word was the Holy Grail instead of self-interest, which is what it is.
Not only is “pay as you go” fair to each driver, but it also means that foreign drivers will also contribute to our cleaner air policies
every car on the road should pay road tax.that way the people and young familys that cannot afford to bye a new car do not get stung. them labour twats are at fault for changing the car tax rules
If you drive a motor home, or pull a trailer,horse box,caravan …..you should have to pay an additional Tax of about £60 which is only £5 a month….I would gladly pay that to keep you all OFF THE ROAD….
I would love to ride a bike again. I used to be a keen cyclist but now I am partly disabled and am only able to drive a car, which I need to visit my wife in her care home. I cannot catch a bus from where I live. So where does that put me? Am I to be penalised for being disabled and wanting to visit my wife of 52 years?
Don’t worry R Woodley, your misinformed opinions won’t affect your lifestyle. Only that of your children and grandchildren.
R.Woodley, I am 50/50 on your comments. The first half I am in full agreement with, the reduction of the ice caps in the 1500’s can’t have been due to any car emissions. The real answer to that previous global warming must have been due to the variation in solar activity, as is probable with all or MAYBE only PART of the current warming. However, we still need to be careful about our emissions, but maybe we cannot be responsible for the solar activity, sunspots and solar flares etc.
Where you went off the rails completely is about your views on Solar Panels. I am at this moment in time running my whole house, 2 freezers both on fast freeze during daylight hours, fridge, battery charger (for my free electric for TV tonight) and of course my computer, all for free from my modest array of Solar Panel and am still exporting a small amount of electricity to the grid for which I get paid about 2P per actual unit exported so that you can buy it at maybe 12P or so per unit. Today at this moment where I am is quite dull, but if it was brighter and sunny I would be exporting quite a bit more. The problem is the assumption that I will export only 50% of what I produce, I get 4P per unit for 50% of what I produce. Agreed at moment on dull day in March I am exporting maybe 10% of generated power and using 90% by putting both my freezers on fast freeze, and charging battery ready to supply TV tonight, BUT when sun is shining I am exporting loads and only getting paid for 50% of my metered production.
So forget about your few candle power that you talked about, and get yourself some Solar Panels installed.
my car Ford Focus 1.6 rEG MK64 OSO 64 PLATE HOW MUCH ROAD TAX PLEASE
Hi Joe, If it’s an existing car the tax will be unchanged as we understand it. Best wishes,
What has always puzzled me is zero car tax??why, they still use the roads and cause damage to the road through usage.
I think all vehicles should be taxed regardless of emissions.
How much will I pay on my car which runs on LPG ?
why isnt evry car taxed the same as they all use the roads the same, nothing to do with pollution bandwagon, just a scam to rob people, also all the 50 billion tax money raised should go on fixing the roads not just the 13% motorists took for a ride as allways,
Car tax should be scrapped entirely and the price added to fuel. The more somebody uses, the more they pay. This is fair. The more a motorist drives, the greater the wear and tear on the roads, and through fuel pricing a proportional price is paid. All vehicles contribute to pollution in one form or another.
I agree with Stephen Gibson – car tax should be scrapped and added to the cost of fuel much fairer to all
WILL NOT HELP THE AIR QUALITY, WE MIGHT AS WELL ALL GET BIGGER CARS AND TO HECK WITH THE EMISSIONS….SO MUCH FOR THE GOVERNMENT CARING ABOUT THE ENVIRONMENT,
Why isn’t the government pursuing VW for its emissions scam ? like the USA, we bought these vehicles in good faith and will now see resale values tumble, what’s good for the goose etc.
It’s about time they taxed the cyclist as the motorist has paid millions having the cycle highways constructed for their use only also they should pay insurance so when they scratch you car we could claim
Why are cyclist not being taxed, why do they not have insurance licence and training? They are a menace to all who use the road and pavement then they could be fined and money generated to from them
Just remember if you own a diesel vehicle. This means all your bills will be going up, all the big chains ,need to get there produce to supermarkets, shops in the country ,all of your parcels etc, so they keep on about emissions the uk we are not the only country that has diesel powered machinery take a look @ others. At least we do not have to wear mask and all this building going on materials have to be delivered, more cost on new houses
Looks like the sale of new cars will drop dramatically. That opens a whole new can of worms.
IE: Fields full of new cars rotting away, lack of demand, factory closures, thousands of people made unemployed. All this sounds familiar. And all because of government greed as always.
Why tax bicycles, when (like electric cars) they produce zero emissions, but are also very light and so do not damage road surfaces, and take up a fraction of the space on the road? A cyclist puts many times more physical energy into their journey than a car driver, and puts themselves at far greater risk of injury or death due to careless and inconsiderate driving by (some) drivers of motor vehicles. They should be rewarded for their efforts. Just think about it, if every cyclist gave up cycling and drove a car instead, that would add many more cars to the road, resulting in more traffic, more congestion, and slowing your journey down even more than the ‘inconvenience’ of having to slow down to pass a few cyclists. Think about it! In any case a ‘cyclist tax’ would be impossible to enforce and would cost more to administer than it raised.
I drive a renault scenic 1.6 lpg dual fuel car and have to pay £260 a year road tax, it is ridiculous.
You all forget one thing the Tories will always find a way to squeeze money from the working man, % wise the rise for the average working man this is huge but % wise for the rich it is spare change, I like many would look at the RFL rate before I buy, but now I can buy something with some more grunt and know I am paying the same as the economical environmentally friendly green driver, my current car attracts a £20.00 PA RFL one of the reasons I purchased it. The only beneficiary from this new scheme will be the chancellor and definitely not the environment , there will be another scheme in the pipework to squeeze more of your hard earned in the name of the environment , many of you voted in these Tories and look where we are now their only intent is to screw the lower classes, Dickensian Britain here we come.
Cyclists are taxed as its included as part of the Council Tax paid by each individual.
They are also subject to the same rules as all other road users and can be fined and prosecuted as needs however the police don’t have the manpower of finances to do so. Maybe a bit of a cycle?
However to say all cyclists are a danger is way too much of a general comment. Unfortunately the minority spoil it for the majority – the same could be said for car drivers AND pedestrians
In reply to Mr Price regarding cyclists, I remember when I lived in Bermuda just after the war, cycling and the horse and carriage were the only means of transport. Even then cyclists had to have a registration number on their bike and had to have insurance as well. Apply the same procedure here resulting in more revenue and safer cyclists.
In reply to Patrick Price, what do you estimate the emissions to be from riding a bicycle ? Why no try it yourself and see how much of a “menace” some car drivers are to you plus the fresh air and exercise may help to keep you fit and clear your brain.
I agree with the previous comments regarding cyclists in general. I grew up in Guernsey a long time ago in my time cycles had to carry a licence plate this also required the cyclist to have insurance
I agree that they are a menace on the roads and pavements with complete disregard for pedestrians not all but a lot if a licence was introduced and insurance made a legal requirement any accidents a claim could be made instead of through the civil courts.
I own a volvo S60 D5 for the last 5 years the MOT says emissions to clean for smoke machine to obtain a reading, still have to pay road tax though
The selfish comments on here about bikes, do you know my bike has insurance along with many thousands of other,it is insured for £3000000, yes three million liability, is your car insured for as much, som unless you have something constuctive to say ,keep quiet.